Luton’s Labour Council has announced it is on course to underspend on services by £5.5 million this year – just 2 weeks after rejecting a Government grant, raising Council Tax for a second year running, cutting frontline jobs and agreeing further contributions to reserves.

Liberal Democrat opposition councillors tackled Labour finance chief Robin Harris about the huge underspend at an Executive meeting on Monday night. After glossing over the figure when presenting the report, he firstly bizarrely claimed that he was not underspending, then twice stated that the Council had a £49 million debt – despite official Council reserves that have consistently increased, and are now nearing this figure.

Labour’s latest budget saw them deliberately refuse Government money and tax residents instead for a second year running, after being among just 1 in 10 Councils to raise Council Tax last year. They have now rejected a total of £3 million of Freeze Grant in favour of charging residents £2.3m more this year, an additional £1.1m for at least the next 2 years.

The estimated £5.5 million surplus is the latest in a series of multi-million underspends, and follows a £3 million underspend last year. Yet Labour have continued to cut valued services.

Speaking after the meeting, Luton Liberal Democrat Deputy Leader, Martin Pantling said:

“ The last time the Council’s likely underspend this year was reported, it was about £3 million. Two weeks ago, in the Budget debate, Councillor Harris admitted it was nearer £4 million. With the Budget now set, we are told it will be £5.5 million.”

“ In this context, it is obscene that Labour councillors have for a second year running taken a political decision to turn down money for a Council Tax freeze and make residents pay instead – while continuing to cut valued services yet pile up reserves.”

“ With Council Tax Bills hitting doormats any day now, residents will be rightly angry at being forced to pay even more for Labour’s mismanagement and political dogma. This £5.5 million underspend could have paid for their latest Council Tax rise five times over – without using any of the £3 million they underspent by last year.”